Toronto city council strongly backed Deputy Mayor Norm Kelly’s proposed property tax increase of 2.23%, but not before city hall descended into sideshow again over a lawsuit filed against Mayor Rob Ford alleging he conspired in a jailhouse attack.

Clarifying the city budget's thornier issues

In a day of budget confusion at city hall, there are more questions than answers. But the National Post’s Carolyn Turgeon does tackle three that have likely confused Toronto residents.

Q. Why are there two property tax increase numbers flying around?

A. The budget executive settled on the mayor’s target of a 1.75% property tax increase in early January, including the 0.5% subway levy and 0.48% for the provincially mandated tax shift. Deputy Mayor Norm Kelly wants to fix the unbalanced budget by raising the rate increase to 2.23% with the levy, which including the tax shift would make it a 2.71% increase for the average homeowner. When he spoke to council Wednesday afternoon, the deputy mayor said the difference between this and the mayor’s preferred increase is $12 per household. “I’m recommending an affordable, balanced budget.” Though $12 could be small change in the long run, Deputy Mayor Kelly was adamant that it would come with benefits such as investments in the school nutrition programs, in the after-school recreational programs, in the fire budget and in youth at risk programs.

Q Tax shift? What is that?

A. A tax shift is a change in taxes that will eliminate or reduces some taxes while adding or increasing others, keeping the overall revenue stable. Mandated by the province, it seeks to shift the property tax burden away from the commercial and industrial property owners and onto the residential class. The shift is happening gradually and, according to the city website, Toronto is on track to meet its target by 2017. In the meantime, it means any tax increase voted into the 2014 budget by council will include an extra 0.48% to accommodate that shift.

Q. So, since they’ve already settled the tax rate first, does that mean they won’t hear the mayor’s $60-million in proposed savings?

A. Hard to say. Mayor Ford’s secret savings are relevant to the tax rate because he claims they will help lower the increase. Yet Thursday evening council voted 32-13 in favour of the deputy mayor’s 2.23% (2.71% with the shift) hike. “They wouldn’t even let me move my motions,” said the mayor. “Now what happens if [a motion] does carry? We have to reopen the tax increase now. They’re not going to reopen it.” It remains to be seen whether the mayor puts his motions forward and, if so, whether the tax increase will have to be negotiated and voted on again.—Carolyn Turgeon

Just as he rose to condemn the tax proposal, reporters scurried about the council chambers looking for confirmation of his latest legal battle, this one launched by his sister’s ex-boyfriend, who alleges the mayor had him beaten in jail to keep him quiet about Mr. Ford’s alcohol and drug use.

Mayor Ford railed against a return to the “gravy train,” but he seemed deflated. Even later, as he proclaimed it “the worst day” of his tenure and lambasted councillors for spending like “drunken sailors,” the embattled chief magistrate looked rattled.

“We could have saved $60-million like that,” he said, snapping his fingers. “They didn’t want to listen to me.”

Council did listen to Deputy Mayor Kelly, who earned a convincing 32 to 13 victory on the tax front, when just a day ago his success seemed precarious. It includes a 0.5% Scarborough subway levy. Afterwards, he shook hands with left-wing Councillor Gord Perks.

“This is a great example of what we can accomplish when we work together,” said the deputy mayor, who assumed many of Rob Ford’s powers after the crack scandal.

He said the increase is in line with inflation, and he denied council is spending wildly.

Not including the subway levy, which the mayor pushed for, the tax increase is less than last year, Mr. Kelly said.

He also stressed that while the latest allegations against the mayor — which his lawyer says he denies — are troubling and a “sideshow,” they are “not the main show.”

City council still has to vote on what the proposed $9.6-billion budget will pay for, a debate that will stretch into Thursday.

Recommendations include an increase to arts and culture funding, more funding for student nutrition programs, an additional $3-million for the TTC and extended library hours.

The vote in favour of 2.23% meant that council did not vote on a batch of other proposals, including a 1.75% increase promoted by Mayor Ford, and a tax freeze pushed by Councillor Giorgio Mammoliti. When provincially mandated property value and tax shifts are taken into account, the approved hike works out to 2.71% for the average homeowner.

For an average house assessed at $499,521, the homeowner will pay $68.69 more, or $2,598 a year. The difference between the mayor’s preferred 1.75% hike and the rate city council approved is on average $12 a year.

Sparks started to fly early on Wednesday, with Mayor Ford getting into a shouting match with one-time ally Councillor Michael Thompson minutes into the day.

In his back and forth with city councillors on the council floor, Mayor Ford vowed: “You want to know where the gravy is? I’ll show you gravy,” he said. “Hiring heritage people. Putting a splash pad at Exhibition Place for $500,000. That’s gravy.”

Councillor Doug Ford accused the “unelected deputy mayor” of “trying to ram the tax rate down the throats of the taxpayers.”

Councillor Gord Perks, however, invoked the city manager’s warning earlier in the day, that starting next term, council is going to have to hike taxes beyond the rate of inflation if it wants to maintain services.

“We keep telling people you can have all your services, but we’ll collect less money from you. Everyone knows that bananas. Everyone knows there never was such a thing as a gravy train,” said Mr. Perks.

The wrangling seemed to amuse Councillor Mike Del Grande, the former budget chief. “It’s election year, some sanity comes back once every four years.”

Councillor Thompson, meanwhile, dismissed the mayor’s budget comments as “embellishing” but acknowledged he continues to be a “distraction,” even for decision makers on the floor of council.

“We’re setting a $10-billion budget for the biggest city in Canada and we are watching this sideshow, with the media stampeding through the council chamber, so it really is very diverting,” said Councillor Gloria Lindsay Luby.

“It’s very scary,” she said of the new allegations in the lawsuit. “If this is all true, I think it’s just another shocker for Toronto, for the community. I had a telephone town hall last night. Many Etobicoke Centre residents said to me they are fed up with being embarrassed, and they’ve had enough of it.”

Councillor Adam Vaughan’s take on the allegations was different: “Who cares? He lives in a crazy world, with crazy people who do crazy things to each other.”